BCS currently manages 60 forklifts across 26 locations, with 12 leased, 41 owned, and 7 rented. The project scope is to evaluate BCS's lease vs buy process for forklifts and provide recommendations. Site manager interviews found a variety of usage patterns and preferences for leasing or buying. Research on acquisition options identified pros and cons of capital leasing versus buying. The student team will analyze BCS and industry practices to develop a decision tool for site managers.

1. 12 Leased
20%
41 Owned
69%
7 Rented
11%
Current Forklift Inventory
Current Forklift Inventory:
60 Forklifts at 26 Locations
Project Scope
Seek out industry leading
practices in regards to
how BCS manages the
Lease vs. Buy process for
forklifts.
Recommendations and
Deliverables:
•Provide site managers with a
decision checklist to conduct
lease vs. buy assessment on a
site basis
• Conduct a strategic sourcing
project = Aggregate to one
supplier for economies of scale.
Internal Research:
Site Manager Interviews
Interviewed
Site
Managers
Number
of
Forklifts
Lease /
Buy
Usage Preferences Maintenance
Site Manager
A
1 Own
3 days a week for 2
months, 1 day a week
for 10 months
Own
Use mechanic
on site
Site Manager
B
1 Own
Used year round but
low usage per day
Own
Service man
comes once a
year
Site Manager
C
1
Own
(used
lease to
own)
Every day for 6
months, 3-4 days a
week for 6 months,
used intermittently
3 year
lease due
to safety
issues
Yearly
maintenance
from dealer
purchased
from
Site Manager
D
1 Own
Winter to spring and
harvest season: 6-7
times a day, otherwise
used a couple of hours
a week
Lease due
to
maintenan
ce
Have contract
for monthly
service but
they actually
come
quarterly
Site Manager
E
7
Own 3,
Lease 4
Lease for 7 months
and all are used all day,
owned forklifts used
80% of day all day
during offseason
Lease, bid
and let
vendors
compete
Leased
forklifts
include
maintenance
Acquisition of Forklift Pros Cons
•High monthly payments
that are often higher than
interest rates
•Lack of initial ownership
•Early termination fees
•Some leases have return
conditions
•The lease is capitalized or
depreciated
•Allows for upgrades and
new equipment
•Ownership transfers to
lessee at end of lease
•Equipment maintenance is
covered
Capital Lease
Buy
•Ownership of equipment
(risk reduction)
•Build equity on purchase
•Lower long term costs
•Maintenance is owner’s
responsibility
•High up front costs
•Additional costs to use
equipment at multiple
locations
Source- de lage landen and BCS Market Intelligence Report
Process
Internal
Research:
Site Manager
interviews
External
Research
Forklift
distributor
meeting
Benchmarking:
Compare BCS lease
vs. buy approaches to
others in the industry
External Research
• One supplier for all forklift
needs
• Purchase without discount
for propane forklift:
• Indoor: $25,000
• Outdoor: $28,000
• 5 year Capital Lease for
propane forklift:
• Indoor: $27,585
• Outdoor: $30,895
Source: Primary Expert Interaction
Student Team
Peyton Boyce
Brian Schmitt
Jordan Vestal
Faculty Advisor
Dianna Wentz
Project Sponsors
Mike Buhr
Krista Smith
Matthew Bowman